WASDE Wheat: Lower U.S. Beginning Stocks, Increased Production

Projected 2017/18 U.S. wheat supplies are decreased modestly this month as reduced beginning stocks are partially offset by slightly higher wheat production. Beginning stocks were revised downward in the latest NASS Grain Stocks report while wheat production increased in the NASS Small Grains Annual Summary to 1,741 million bushels.

Although all wheat production increased minimally from last month, the by-class changes are relatively more significant as larger Durum and Hard Red Spring production more than offset declines in Hard Red Winter and Soft Red Winter. Projected 2017/18 feed and residual is reduced 30 million bushels this month to 120 million as the NASS Grain Stocks report indicated lower-than-expected June-August disappearance.

Additionally, projected 2017/18 U.S. corn supplies are the second highest on record, which is expected to dampen wheat feed and residual use for the rest of 2017/18. The other wheat use categories are unchanged this month and projected 2017/18 ending stocks are higher at 960 million bushels but still well below last year’s 1,181 million.

The projected 2017/18 season-average farm price is unchanged this month at the midpoint of $4.60 per bushel but the range is narrowed 10 cents on each end to $4.40 to $4.80.

Global 2017/18 wheat supplies are increased, primarily on higher production forecasts for Russia, EU, and India more than offsetting a decline in Australia. Based mainly on harvest results to date, Russia’s 2017/18 wheat production is increased 1.0 million tons to a new record of 82.0 million tons.

This is well above last year’s previous record of 72.5 million tons. EU wheat production is raised 2.2 million tons to 151.0 million, largely on higher production in France.

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Australia’s wheat production is reduced 1.0 million tons to 21.5 million on persistent dry conditions in most of eastern Australia. This would be Australia’s lowest wheat output since the 2008/09 crop year.

Foreign 2017/18 trade is fractionally higher this month as reduced exports by Australia are offset by increased exports from Canada. Projected imports are lowered for India and Turkey as increased 2017/18 production for both countries is expected to reduce import needs. Total world consumption is projected higher, primarily on greater usage by India, EU, and Russia on their increased supplies. Projected global ending stocks are nearly 5.0 million tons higher this month at 268.1 million, which is a new record.

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